It feels like AI has burst into our lives in an extraordinarily rapid way. Technologies that could once only be imagined are becoming reality in front of our eyes. AI has become the zeitgeist, the conversation of the moment. In response, many leaders are looking for ways to incorporate AI and machine learning (ML) into their businesses to enhance their productivity and give them a competitive edge. With hundreds of new AI applications entering the marketplace on an almost weekly basis, understanding the options and knowing where to start can feel overwhelming.
However, there is a strategic imperative for leaders to enhance their offer in line with major digital players. AI can bring unique and exciting opportunities to engage with customers, meet their needs, and create additional value. What’s clear is that ignoring the shift to digital and the opportunities presented by AI isn’t an option for businesses that want to meet the rapidly changing needs and expectations of their customers. That’s why businesses must use AI to enhance their business model, and having the right talent on board is the too-often-missed element in AI project success.
Your business model: the lens through which to view AI
To begin the journey into any digital transformation, you must strip right back to the core of your company – your business model. Business models vary across companies, but, in essence, they are the vehicle through which your company creates and delivers value to your customers, employees, and partners. They are the mechanisms you use to drive profit.
Using your business model as the lens through which to view AI will help identify some of the challenges arising for your business. With rapid advances in technology and digital capability, consumers’ ideas of what value means are constantly shifting. Customers – their needs, behaviors, and expectations – are changing faster than businesses can keep up with. For consumers, value is becoming more elusive as it evolves beyond the simple definition of ‘utility of goods’.
However, companies must not only keep up with the AI tools available and the expectations of their customers but also navigate the interplay between these two axes. In this paradigm, digital is not the end but the means to deliver the highest-quality customer value proposition (CVP). While this requires a new way of operating based on continuously evolving and understanding what constitutes value in the customer’s mind, the reward can be huge. It’s the ability to respond more quickly, pivot with the market, and explore new revenue streams. It’s the ability to capitalize on the opportunities presented by AI, leading to sustained competitive advantage for those who invest in it.
Talent is the secret ingredient in a successful strategy
While most companies have a fair idea of their CVP (Customer Value Proposition), many have never given thought to their EVP (Employee Value Proposition). This could be a strategic mistake. A 2013 study on innovation conducted by Chalmers University of Technology, using Google as a subject, concluded that the top two factors contributing to Google’s success are individual employees followed by employee culture. They attributed both to the talent selection process.
For a company to create an environment in which innovation will thrive, employing the right people is a crucial step. Having a diverse leadership team, for example, will result in a more innovative organization that is 70% more likely to capture new markets.# A study conducted by Forbes showed that workplace diversity is the key driver to innovation.#
As Steve Forbes has noted, ‘The real source of wealth and capital in this era is not material things – it’s the human mind, the human spirit, the human imagination, and our faith in the future.’# This is a crucial point to remember on your AI journey. AI is not a replacement for human talent. Instead, it’s a tool for talented individuals to use to unlock new levels of creativity and productivity.
The foresight to see the potential of AI and the creative ability to realize and use digital innovations at pace will set companies over and above their competitors, but this requires high-performing colleagues to be in the right place to bring the necessary value.
An industry study by McKinsey discovered that high-performing team members are up to 800% more productive than average employees.# On a typical three-year project, this would mean that replacing just 20% of average-ability talent with this high-performing talent would see that project completed in one year, getting you to the market up to two years faster than the competition.# Ensuring these employees are properly skilled and equipped to use AI creatively could drive further improvements and operational efficiencies.
These are the essential steps that businesses must take in order to succeed in implementing a resilient, effective business model. Increases in employee productivity are what will, in turn, lead to the successes in AI that all businesses aspire to. But AI innovation starts with having the right team in place, and companies must ensure that this is where progress is made if they are to gain a competitive advantage.
About the author
Peter Verster is the author of “AI for Business” and Founder of Northell Partners, a data and AI solutions consultancy in the UK. With over 20 years of experience in strategically applying data and AI to real-world problems, Peter’s direct, pragmatic, and hands-on style has earned him the respect of leaders in some of the world’s largest organizations.
With solid academic foundations earned at Saïd Business School, University of Oxford, Peter enables businesses to engage with more customers, optimize operations and transform their products and services. Born and bred in South Africa, Peter now lives in Cheshire, England, with his wife and two daughters. He loves golf and thrives at the intersection of technology and business.
